Partial takeover offer opens for AIAL shares

Web site: www.cppib.ca
Partial takeover offer opens for Auckland International Airport shares

Significant premium to both the pre-takeover and current trading price Offer opens today and closes on 13 March 2008 If successful, CPPIB will bring expertise and resources to AIAL On successful completion of the offer, CPPIB intends to re-engage with the AIAL Board to present an amalgamation proposal to shareholders

AUCKLAND, NZ (14 December 2007): The Canada Pension Plan Investment Board (CPPIB) partial takeover offer is now open, with offer documents being mailed to shareholders today.

The offer, through CPPIB’s wholly-owned subsidiary NZ Airport NC Limited, would take CPPIB’s holding to 40% of Auckland International Airport Limited (AIAL), if successful.

Shareholders are being offered $3.6555 per share, which represents a premium of 31% or $0.8555 over the share price at market close yesterday and a premium of 50% above the volume weighted average trading price over the one month period up to and including 4 May 2007, the day just prior to takeover speculation. The offer is at the very high end of comparable international airport valuations.

The offer will remain open until 13 March 2008.

“We strongly believe it is an attractive and fair offer, and encourage shareholders to accept and approve the offer,” CPPIB’s Senior Vice President - Private Investments, Mark Wiseman, said.

“In the event that some shareholders decide not to accept the offer, they are still encouraged to approve the offer. We believe that all remaining shareholders will benefit significantly from an amalgamation and from the value CPPIB can bring to AIAL.”

The offer re-confirms CPPIB’s consistent stance on seeking only a minority stake in AIAL.

Moreover, CPPIB has entered into a deed restricting its voting rights on resolutions to elect and remove directors of AIAL to just 30% of the votes that may be cast on those resolutions in order to comply with certain regulations governing its investments. This means that with a 40% holding in AIAL, CPPIB will only be able to vote 25.7% of the total number of shares in AIAL on resolutions to elect and remove directors. This restriction can only be varied or discharged in accordance with the terms of the deed.

The offer will deliver significant value to AIAL shareholders while preserving substantial levels of New Zealand ownership of the airport.

Following the successful completion of the offer and further to its plan to optimise AIAL’s capital structure, CPPIB intends to re-engage with the AIAL Board to have its proposed amalgamation presented to AIAL shareholders.

CPPIB was disappointed that shareholders were not provided with the opportunity to consider and vote on the detailed amalgamation proposal CPPIB presented to the AIAL Board on 20 September 2007.

Mr Wiseman said “We believe our amalgamation proposal was in the interests of AIAL stakeholders and, had it been accepted, would have resulted in the substantial recognition of value for all AIAL shareholders.

“We are a long-term, patient investor with the ability to bring extensive resources to enhance the performance of the airport business and assist the management team in achieving the goals of the airport’s Master Plan. We are confident AIAL shareholders will recognise the value we bring to the table.

“CPPIB’s management team has direct prior experience in investments in several Australian airports and we intend to bring our experience and industry knowledge to support the growth and development of AIAL. This includes leveraging our network of contacts established through $700 million of investments in aeronautical companies.

“We have also identified long-term opportunities to improve AIAL’s performance in route development, property development, retail and car parking. We will work to develop the already exceptional New Zealand-based AIAL management team and we support the dedication of additional resources to augment and bolster the local team. We will also seek to work with AIAL to explore other international airport opportunities together.”

CPPIB confirms a change to the indicative terms of the proposed amalgamation as initially outlined on 16 November 2007, which modifies the weighting of the convertible note and ordinary share components of the stapled securities. These changes were announced by AIAL on 6 December 2007. Stapled securities issued under the proposed amalgamation would now include a convertible note with a face value of $2.75 (previously $3.35), an ordinary share with a face value of $0.7055 (previously $0.1055) and $0.20 cash (unchanged).

Mr Wiseman said “Having spoken to major shareholders and listened to market feedback, as we have done throughout this process, we have refined the indicative terms of the proposed amalgamation structure to enhance its attractiveness to shareholders.”

NZ Airport NC Limited also announced today, by notification to NZX, that it will pay broker handling fees in connection with its partial takeover offer for AIAL.

This announcement does not constitute an offer to any person, including any AIAL shareholder, to subscribe for any securities that would be issued in the proposed amalgamation. CPPIB is not seeking any money in respect of the proposed issue of stapled securities and no applications for securities would be received and no stapled securities would be issued to any AIAL shareholder under the proposed amalgamation unless the AIAL shareholder has received an investment statement in relation to the stapled securities. - ends -

About CPP Investment Board:

The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. As at September 30, 2007, the CPP Fund was C$121.3 billion (NZ$152.4 billion) of which C$2.5 billion (NZ$3.1 billion) represents infrastructure investments. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments.

UBS has acted as financial advisor and Bell Gully has acted as legal advisor to CPPIB.

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